PHASE 2 RFG ADVISORY COMMITTEE
                        MEETING SUMMARY - JULY 19, 1994


          To ensure the smooth transition to Phase 2 reformulated gasoline
          (RFG), the RFG Advisory committee met on July 19, 1994, in the
          first of a series of planned meetings.  The purpose of the
          Advisory Committee is to provide a mechanism for discussing
          issues and concerns with all parties affected by the plan to
          produce, distribute, and use reformulated gasoline in California.
          The Advisory Committee's Chairwoman is Miss Jacqueline Schafer,
          Chairwoman of the Air Resources Board (ARB).  The committee
          consists of major California oil producers, most automobile
          manufacturers, automobile or fuel dispensing equipment
          manufacturers, transportation companies and others.

          Miss Schafer began the meeting by welcoming the attendees.
          Pointing out the significant environmental and economic impacts
          of RFG, she stated that RFG is the critical half of the ARB's
          motor vehicle control strategy.  Implementing the RFG regulation
          will result in 20,000 temporary jobs and hundreds of permanent
          jobs; also, many refineries will improve their overall efficiency
          with the modernizations required for producing RFG.  Miss Schafer
          instructed that three subcommittees should be formed to provide
          technical review and expertise on compatibility, supply, and
          public education regarding RFG.  All parties were encouraged to
          participate on the subcommittees.  She acknowledged antitrust
          concerns of the oil companies and wanted to assure them we would
          work to avoid any conflicts with antitrust laws.  She proposed
          that advisory committee meetings be held quarterly.

          Overview of the Reformulated Gasoline Program

          Mr. James Boyd, Executive Officer of the ARB, presented an
          overview of California's RFG program, ARB activities related to
          our RFG program, and the federal RFG program.  He made the
          following points:
          - Vehicles are major contributors to California's air quality
            problems (75% of ozone violations in CA).
          - Vehicle and fuel programs are an integral part of our efforts to
            reduce air emissions.
          - California's reformulated fuels program will result in
            significant and immediate emission reductions (an average of 310
            TPD ozone precursors).
          - The California RFG program is cost effective (approximately
          - ARB staff is committed to ongoing efforts to ensure a smooth
            transition to Phase 2 RFG through monitoring efforts, public
            education and performance testing.
          - At this time, refiners are on schedule (10 of 13 refiners
            completed CEQA and 9 have air permits).
          - The EPA is implementing Phase 1 and Phase 2 RFG programs
            effective January 1, 1995 and January 1, 2000 respectively.
          - Periodic updates will be provided to the Air Resources Board
            about every six months on California's Phase 2 implementation
            issues including activities of the Advisory Committee.

          Formation of Subcommittees

          Mr. Peter Venturini, Chief of the Stationary Source Division for
          ARB,  discussed the ARB recommendations for the roles and
          responsibilities of the subcommittees mentioned earlier.  The
          subcommittees would be performance, supply [later renamed
          transition], and public education.

          - The performance subcommittee would ensure performance and
            compatibility with motor vehicles and storage systems and advise
            ARB on the design of a vehicle testing program.
          - The supply [transition] subcommittee would monitor supply,
            demand, distribution, and compliance.  Also, the subcommittee
            would evaluate the adequacy of potential supply.
          - The public education subcommittee would inform the public about
            the impacts and benefits of RFG.

          Investigation of Compatibility and Performance

          Mr. Dean Simeroth, Chief of the Criteria Pollutants Branch for
          ARB, presented information regarding the existing California
          vehicle fleet and RFG specifications.  Further, he discussed
          current ARB investigations in this area and proposed a test
          program to identify potential compatibility problems with the
          introduction of RFG.

          The existing fleet of 23 million on-road and 6 million off-road
          vehicles and engines consume approximately 36 million gallons of
          gasoline per day.  This large number and diversity of engines
          present potential compatibility problems with the introduction of
          RFG.   To identify potential problems, the ARB will conduct a
          vehicle testing program.  Regarding this, the following issues
          were discussed:

          - Related studies and ARB internal workgroup investigations
          - Testing issues, i.e., material compatibility and vehicle
          - Vehicle fleet selection criteria
          - Sample size and data collection
          - Lab testing and vehicle testing
          - Phase 2 test fuel criteria
          - Amount of fuel required for the test program

          General Motors Presentation

          Dr. Gerald Barnes, Manager of Alternative Fuels and Heavy-Duty
          Activities for General Motors Corporation, discussed potential
          Phase 2 gasoline issues and testing.  He stated the automobile
          industry has, in general, supported the use of RFG as a means of
          reducing emissions in both new and existing vehicles.  Specific
          concerns with an RFG fuel are as follows:

          - A reduced lubricity leading to wear in fuel pumps and injectors
          - Incompatibility with elastomers leading to swell, shrinkage, or
            other changes
          - Corrosion of metallic parts, particularly when the alcohols are
            used as oxygenates
          - Intake deposits that will affect vehicle performance
          - Driveability as related to low temperature performance and cold
          - Impact of RFG on fuel economy since most of the proposed changes
            will reduce the fuel's energy content
          - Fuel switching, i.e., the use of federal fuels in California
            vehicles and the impact on vehicles equipped with OBD II systems
          - Additional cost of RFG

          GM and others have conducted both bench and vehicle testing of
          fuels in anticipation of the introduction of Phase 2 RFG.
          Testing thus far has not shown any problems with Phase 2 RFG.
          Some testing includes the following:

          - GM has simulated a 100,000-mile durability test using an entire
            fuel system.
          - Ford tested for metallic wear using various fuel compositions.
          - Nearly all of the major auto manufacturers have tested for
            elastomer compatibility; and, all are testing for durability
          - The GM/WSPA/ARB low RVP fuel tests included vehicles dating back
            to a 1969 model.
          - ARCO has marketed fuels similar to, if not identical to, phase 2

          Mr. Barnes also suggested additional vehicle testing using a
          representative mix of vehicle fueling technologies and model
          years including older vehicles.  He also suggested testing under
          different ambient temperature conditions using fuels of different

          ARCO Presentation

          Mr. Jack Segal, Manager of Fuels Development for ARCO Products
          Company, presented ARCO's experience with their EC series of
          gasolines.  The EC fuels are similar to RFG and have been used in
          southern California for a number of years.

          EC-1, introduced in 1989, was a replacement for the leaded
          regular gasoline and was designed for pre-catalytic cars and
          trucks: the older fleet.  ARCO is still selling EC-1 today for
          use in off-road vehicles and engines.  The EC-P fuel, introduced
          in 1990,  was intended for the premium market.  When ARCO
          introduced the EC-P, they formed a committee to monitor
          complaints; to date, there have been almost no complaints.  ARCO
          is supplying a Phase 2 RFG to the Federal Express Clean Fleet
          Program; twenty-one of the vehicles using RFG have been running 
          for two years without incident.

          Mr. Segal displayed a slide comparing the EC fuels with Phase 2
          RFG; the fuels are very similar.  Of the eight regulated
          parameters, four are being met by the EC fuels: aromatics,
          oxygen, benzene, and T50; the other four parameters are not that
          far off.  He also proposed fuel parameters for fleet
          compatibility testing, and noted that fuel is going to be an
          expensive part of a test program.

          General Discussion

          After the foregoing presentations, Miss Schafer opened the
          meeting to questions and comments.  Many participants voiced
          support for the advisory committee and what the committee hopes
          to accomplish.  The auto manufacturers and others also expressed
          support for the use of RFG as a means of achieving emission
          reductions.  Many of the oil refiners added that they felt ready
          for the introduction of RFG in 1996 and did not anticipate
          problems.  There was also general support for a vehicle test
          program and public education.  Some participants supported the
          investigation of supply and demand; however, as noted previously,
          the oil companies had serious concerns regarding antitrust issues
          and were uncertain about participating in these discussions.
          Other comments included the following:

          - The subcommittees should set up a timetable with completion
            dates for